What is Customer Experience Management?

My job title is Director, Customer Experience. So what do I do? Better yet, what am I supposed to do?

My background includes organizational development and strategic human capital management (often called talent management, but not the kind that represents entertainers). In those roles I would approach this problem by completing a job analysis. I might use the Hay Methodology or I might use critical incident debrief or I might just Google for awhile to get things started. Of course, the path of least resistance is to search the Internet so that it where I started when I was hired.

Now, I know that I was hired because Silver Hill Financial likes to capture strong talent when they find it on the street (and then figure out how they can add value) and they liked my work with customer-impacting processes, systems, and people while at PQS, Mundo Strategies, and Royal Caribbean. What I did not know about was this field called Customer Experience Management that they kept talking about. They had a few specific projects that were assigned to me right away. I filled the rest of my time with understanding the business and researching CEM.

What I found was fairly interesting. Clearly, the field of Customer Experience Management is fractured or simply immature. So many vendors of so many disparate products and services were all claiming to be CEM experts and service providers (e.g. ResponseTek has Google's current #1 ranking but only sells opt-in surveys and analysis). However, each of them had very narrow views of what CEM is. (Their definition of CEM just happened to be exactly aligned with what they were selling, but I am sure that must have just been coincidence.) I learned that:

1. CEM is really just another term for Customer Relationship Management (CRM) - at least that is what Wikipedia would have me believe.
2. CEM is really NPS (net promoter score) according to Fred Reichheld's fans.
   
3. You can get a certification in CEM, which results in a lot of ideas.
   
4. CEM is "the process of strategically managing a customer's entire experience with a product or a company" according to brand guru Bernd Schmitt.
5. CEM "represents the discipline, methodology and/or process used to comprehensively manage a customer's cross-channel exposure, interaction and transaction with a company, product, brand or service" according to prolific blogger Leigh Duncan.
6. CEM "combines research insights and experience design expertise to measure and enhance each of these "moments of truth," based on what is most important to the customer"according to LRA Worldwide, which seems to have the most complete view of the work that needs to be done.

The deeper I dug, the more I turned up. If you are in the customer service department then your vendors are telling you that they have Customer Experience Management solutions. If you are in marketing then your vendors say the same thing. If you are in product or store design, the same. Call center, the same. Sales, the same. IT, the same (especially if you are in charge of the company's Internet or mobile phone site). HR, the same...

HR, you ask? Well, yes, HR is the department that makes sure you hire, train, and reward people that deliver exceptional "moments of truth". If you don't believe me, just ask the HRIS software vendors!

However, I also found vendors that are starting to use research to point out that competitors are not being accurate in their claims of Customer Experience Management excellence. For example, the call monitoring companies that claim to provide the best CEM solutions started attacking the CRM software vendors by pointing out Gartner research showed that 55% of CRM implementations actually drive customers away. (See my favorite CRM demo here.) Vendors of alternative survey questions have attacked NPS. Customer service solution providers have been attacked because the teams they serve are often called after a service failure, which is reactive instead of proactive. In fact, if you look for articles that debunk Customer Experience Management or attempt to expose the myths, you can spend several hours reading online.

I am left with my original question. What is Customer Experience Management? It seems that the answer is short, but very broad. Customer Experience Management is the active management of all aspects of a company that have any impact on the customer at all. Suddenly, we realize that decisions made by executives that lead to lower employee morale have an adverse impact on our customer's experiences. When we inadvertently put incorrect information on our website or a press release then we have hurt the experience. When we actively monitor references to our company in the press and online we are engaged in CEM. When we ensure that new hires who may contact or be contacted by our customers have the right "price of admission" competencies we are managing the customer experience. When we record and score calls made by our contact center we are actively managing the experience. When we streamline a process that reduces cycle time by 3.4% we have improved our customer's experience. When we switch to recycled plastic containers because research indicates that our most profitable customers are "green" then we are using great customer experience management. The list goes on and on. CEM requires a passion for the customer's experience by the company's executives and everyone else. It has to be ingrained in the culture and a part of every decision. That is what Customer Experience Management is.

Did Customer Experience Management Die With The Economy?

I was doing a little research ahead of my conference session at The Customer Experience and Engagement Event in Orlando this April. As I was looking for prime examples of exceptional customer experience I noticed that many of the companies that excelled at managing the experience (defined as driving not just loyalty, but advocacy) have been having serious troubles. One of the most notable is Starbucks, which exploded with stores after 1987 and is now falling apart at the seams. Starbucks survived the dot com bubble burst and a few of the other bumps along the way, but now it is in serious trouble despite continuing to deliver a superior experience.

Is the price of the exceptional experience no longer worth the cost? Consumer confidence is way down, unemployment is way up, and the stock market is in full of big, ugly, burly bears. However, capital is now in short supply and that may be just as important as the human side of the equation. With over 50% of all loans being made by investors (did you think banks were loaning the amount of money that was growing out economy over the past 20 years?), and those investors on the sidelines or wiped out, people simply don't have the money in their bank accounts right now. Most people are not cashing in their 401K's right now, but they look at their statement and realize that they have lost upwards of 60% of their retirement funds. This deadly combination of real and perceived losses and future risk is hitting the experience economy companies where it really hurts, the wallet.

What businesses are doing well right now? Discount retailers, fast food, trash collection, and mortuaries. As long as people keep having babies, the last two will always be growth industries, but the first two are signals that people are cutting way back on expenses. New terms have entered our lexicon to express our desire to avoid major expenses (e.g. staycation). We are fixing our old cars instead of buying new ones. I have even heard of people buying books instead of going to the movies (gasp)!

Meanwhile, the companies that prided themselves on having the most addicted customers in their industries have been badly hurt by the cost associated with producing such a fabulous experience. Just look at this year's nominees for Fast Company's Customer Experience Awards (yes, these are the nominees for the October 2009 issue):

• USAA is consolidating locations, which will result in fewer jobs as employees refuse to move
  
• Build-A-Bear is cutting costs and eliminating Friends 2B
• Virgin Atlantic is eliminating 7% of its workforce despite also leading all airlines with a score of 90.8 in the Market Metrix Hospitality Index (MMHI)
• One of W Hotels' properties is in foreclosure (but is not expected to close)
• At least Cabela's is having a banner year (due to gun sales, which you can interpret any way that you want); Kiehl's is expanding in the Americas; and Zappos is still selling shoes like hotcakes after busting a $billion last year
  

To be fair, companies must look for every available opportunity to become more efficient as consumer consumption drops precipitously. Business Week prefaced its entire section in last week's Customer Service Champs with the heading "When Service Means Survival". Then they open with an example of how Hertz is killing its reputation with loyal customers after a ~4,000-person layoff. The question that companies need to be asking themselves is, "How do we survive this downturn without losing our advocates?" The answer to that question will help drive decisions that will lead to long-term viability, not just cuts that appease the Board of Directors.

The Importance of Your Online Reputation

Many moons ago I heard a piece on NPR about online eyeglass vendors. I have been wearing glasses since college and have always disliked the process of buying new glasses every time my prescription gets updated. First, I don't appreciate the pressure put on my by the optometrist to buy those glasses immediately from his/her retail store. This pressure comes in the form of withholding the written prescription until after I browse their selection. Second, I don't like the fact that the frames that actually look good on my face are ten to thirty times more expensive than the ugly ones, yet they use less plastic and metal in construction. According to Daniel Pinkwater, I finally have an option if I can only get my optometrist to give me both the written prescription and a number known as pupillary distance (the distance between the pupils of my eyes).

I did a great deal of homework because I had just filled my latest prescription and was about nine months away from visiting the eye doctor again. The Internet is full of debates and articles that are for and against buying prescription eyeglasses online, as well as articles that are just informative about the online retailers and how they are leveraging the Internet. I found that there were nine very popular companies and perhaps 25 smaller players, many of them overseas. Given that the big nine have had a great number of customers, they also had a large number of very vocal detractors. Some chose to confront the dissatisfied customers head-on by responding to the complaints wherever they were listed, while others simply ignored them. What did this tell me, as a potential customer, about what I should expect from these online vendors?

The big nine are rated and reviewed all over the Internet. Some examples that I found useful include:
39DollarGlasses
EyeBuyDirect
EyeglassDirect
GlassesShop
GlobalEyeglasses
Goggles4U
Optical4Less
SelectSpecs
ZenniOptical

There are also comments about or by some of the other vendors:
BestPriceGlasses
Discount-Eyeglasses

In the end, I chose to test three online vendors with inexpensive orders. I purchased glasses for my wife from EyeBuyDirect.com because she found a frame that she loved and they could make her prescription (her prescription is outside of many vendors' ranges). I purchased glasses for myself from Discount-Eyeglasses.net because they were the least inexpensive total package ($26 included shipping) and from BestPriceGlasses.com because they had the cheapest progressive lenses ($52.40 included shipping). Look for the actual transaction experiences and my opinion of the products in future blog entries.